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GCC to raise global share of aluminum output to 15%
Published in The Saudi Gazette on 12 - 07 - 2012

JEDDAH – The Gulf Cooperation Council (GCC) will boost their share of global aluminum output to 15 percent by the end of the decade, the Gulf Organization for Industrial Consulting (GOIC) said in a study.
"After the completion of new smelter projects in some GCC members, the total aluminum production in the region will surge to nine million tons per year, accounting for 15-17 percent of the world's total output," GOIC said.
The Doha-based organization said that at the end of last year, GCC countries accounted for around 10 percent of global aluminum production, with annual output capacity of nearly 3.6 million tons of the metal.
The GCC's total annual aluminum output will grow to 9 million tons following the completion of new smelter projects.
At the end of 2011, the number of aluminum projects in the region rose to 44 from 33 in 2000.
In the coming 12 years, GCC countries, which have invested $17.3 billion in aluminum projects, with nearly 47 percent or around $8.5 billion of the funds invested by the UAE, are forecast to increase these investments by $25 billion.
It said heavy investments into the sector boosted the number of aluminum projects in the GCC to 44 at the end of 2011 from 33 in 2000.
GOIC expected GCC states to invest a further $25 billion into new aluminum projects and expansion of their existing smelters in the next 12 years as part of an industrial drive to reduce reliance on unpredictable oil sales.
The report showed the new investments include around $5.8 billion in Qatar's smelter, which was inaugurated in 2010 with a production capacity of 585,000 tons per year. About $8 billion will also be pumped by Emal in Abu Dhabi to push up output to 1.4 million tons while more expansions are on the cards in Dubai and Bahrain, where the region's first smelters were set up.
Saudi Arabia is also planning to set up a $3.8-billion smelter while Oman has completed its first aluminum plant in Sohar.
GOIC said GCC nations need to push ahead with such projects to face a rapid rise in domestic demand because of massive infrastructure projects.
External demand for their products is also expected to surge as global consumption will likely pick up in the near future following a slowdown due to the 2008 global fiscal crisis, it added.
Aluminum projects in the GCC countries are part of overall industrial plans aimed at diversifying their economies away from unpredictable crude oil exports, which still account for at least two thirds of their national income.
The six members have pumped in excess of $180 billion into the non-oil manufacturing sector to build light to medium industries, including petrochemicals, building materials, medical supplies, chemicals, foodstuffs, paper, furniture, home appliances and machinery.
Massive investments boosted the GCC's combined non-oil industrial exports to more than $50 billion in 2011 from less than $5 billion a year during 1990s.
Mahmood Daylami, Secretary General of the Gulf Aluminum Council, (GAC), said an estimated 20 percent of locally produced primary aluminum is consumed within the GCC with 50 percent of locally utilized aluminum processed further in secondary production and exported to international markets. This highlights a key point about the downstream aluminum production in the GCC. With only an estimated 10 percent of local primary aluminum produced in the region being utilized by regional downstream players, the downstream aluminum industry within the GCC can be said to be underdeveloped.
Construction is underway on a $10.8 billion joint venture between Saudi Arabian Mining Company Ma'aden) and Alcoa. The project intends to integrate the entire aluminum production chain, from mining to recycling. Production is slated to begin in 2013 and produce 740,000 metric tons per year by 2014.
A joint venture between Norsk Hydro and Qatar Petroleum reached full capacity of 585,000 metric tons per year last year.
Rio Tinto was the first to open a joint-venture project in the region. Sohar Aluminum, which Rio Tinto owns with Oman Oil and Abu Dhabi National Energy Company (TAQA), reached full capacity of 360,000 metric tons per year in 2009.
The Abu Dhabi government, meanwhile, is seeking industry partners to set up shop in the $7.2-billion Khalifa Industrial Zone Abu Dhabi. The zone is leasing land around the state-owned Emirates Aluminum smelter to manufacturers. The smelter is currently producing 750,000 metric tons per year of aluminum, with plans to increase output to 800,000 metric tons per year by the end of 2012. The smelter will eventually achieve capacity of 1.3 million metric tons a year, according to the Emirates Aluminum website. – SG


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